Bloom Energy Trades at a 380x P/E Ratio. Here’s What Has to Go Right to Justify That.
For years, Bloom Energy (NYSE: BE) lost money as it worked to perfect its hydrogen fuel cells. Even as the technology improved, it still wasn’t clear that there was a huge market opportunity. Artificial intelligence (AI) has dramatically changed the story. The only problem is that Wall Street is pricing in a lot of good news, with Bloom Energy’s price-to-earnings ratio sitting at a shockingly high 380x. Can the business live up to investor expectations?
Bloom Energy’s original focus was on developing a technology that would provide clean energy. The main byproducts of using hydrogen to produce electricity are heat and water. This is good, but not necessarily enough to make Bloom Energy a winner. However, the fact that the company’s fuel cells can provide clean, remote, off-grid power has suddenly become very important. Artificial intelligence is a power-hungry technology, and the electric grid is struggling to keep pace with demand. Bloom Energy’s hydrogen fuel cells enable AI data centers to come online more quickly.
Image source: Getty Images.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.